Tech stocks on the Nasdaq.
Peter Kramer | CNBC
of Nasdaq has risen for the fifth straight week, up 3.3% over the last five days. This is the longest consecutive weekly win for a tech-powered index since the stretch ended in November 2021. Worst year since 2008the Nasdaq is up 15% in early 2023.
Last time tech stocks rose for such a long time, investors geared up for electric-car makers Livians big hit IPOthe U.S. economy was shutting down strongest year The Nasdaq was trading at a record high for growth since 1984.
Much less champagne popping this time around. Cost cutting has replaced Wall Street’s checklist growth, and tech executives value efficiency over innovation.of IPO market Dead. dismissal Abundant.
Earnings reports are the talk of the week, with results from many of the world’s most valuable technology companies. But most of the time the numbers weren’t good.
apple missed a quote For the first time since 2016, Facebook parents meta Recorded Earnings declined for the third straight quarter, Googlemain advertising business shrunkenWhen Amazon its closure Weakest year We have achieved growth in our 25-year history as a listed company.
Investor reaction to the individual reports was mixed, but all four stocks ended the week with solid gains. microsoftreported earnings for the previous week and published lackluster guidance Revenue growth for the quarter is expected to be only about 3%.
Cost control is king
Meta was the group’s best performer this week, with its stock gaining 23%, its third best week to date.among them earnings report Wednesday’s sales were slightly ahead of forecast despite lower sales than in the same period last year, and the first quarter forecast was largely in line.
The key to Larry was the CEO Mark Zuckerberg’s 2023 is “Year of Efficiency” And his promise, “We are focused on becoming a stronger, more agile organization.”
“It was really a game changer,” Stephanie Link, chief investment strategist at Hightower Advisors, said in an interview with CNBC’s Squawk Box on Friday.
“The quarter itself was fine, but it was the cost savings that ultimately earned them credibility. I think that’s what really made Meta so successful,” she said.
Zuckerberg acknowledged that times are changing. From his IPO in 2012 to his 2021, the company has grown from 22% to his 58% annual growth. However, 2022 revenue will fall by 1%, and analysts expect him to grow by only 5% in 2023, according to Refinitiv.
Mr. Zuckerberg said on the earnings call that he doesn’t expect the decline to continue, but “I don’t think it will return to what it was before.”meta announced In November, 11,000 jobs were cut, or 13% of the workforce.
Link said the reason Meta’s share price soared post-earnings was because “expectations were very low and the valuation was very attractive.” The stock lost almost two-thirds of its value last year.
Navigating a ‘Very Challenging Environment’
Apple, which fell 27% last year, is up 6.2% this week. steep descent Earnings for 7 years. CEO Tim Cook A strong dollar, production issues in China impacting the iPhone 14 Pro and iPhone 14 Pro Max, and the overall macroeconomic environment have impacted results.
Neuberger Berman analyst Dan Flux told Squawk Box on Friday: “Over the next few months and quarters, we will see a return to growth that the market will start to downplay.In the face of these macro challenges, we continue to like the name. .”
Successful Amazon CEO Andy Jassy Jeff Bezos In mid-2021, his company took the rare step of joining an earnings call with analysts on Thursday after announcing Prediction weaker than expected in the first quarter. Amazon in January start layoffsMore than 18,000 jobs are expected to be lost as a result.
“This last quarter marks the end of my first year in this role and given the economy and some unusual parts of our business, I thought this could be a good one to join. rice field.
Managing expenses is a big topic for Amazon. Amazon expanded rapidly during the pandemic and later admitted that it hired too many people during that time.
“We work hard to streamline our costs,” says Jassy.
The alphabet is also in reduced mode.company announced last month It means cutting 12,000 jobs. The revenue shortfall in the fourth quarter included disappointing sales from lower ad spend on YouTube and weakness in the cloud division as companies tightened their belts.
Alphabet’s chief financial officer, Ruth Porat, told CNBC’s Deirdre Bosa that the company is significantly slowing its hiring pace to ensure long-term profitable growth.
Alphabet shares ended the week up 5.4%, even after giving up some gains after Friday’s plunge. The stock is currently up 19% year over year.
Alphabet CFO Ruth Porat at the WEF in Davos, Switzerland, May 23, 2022.
Adam Galika | CNBC
If the Nasdaq continues its uptrend, recording a sixth week of gains, it would match its longest rally since the stretch that ended in January 2020, just before the Covid pandemic hit the US.
Investors have turned to small business earnings reports. Some of the names they’ll hear from next week include Pinterest, robin hood, agree with and cloudflare.
Another area of technology that flourished this week was the semiconductor space. As with consumer tech companies, there hasn’t been enough growth to excite Wall Street.
AMD on tuesday beat Although it impacted sales and profits, analysts said revenue for the quarter was down 10% year-over-year. intelAMD’s main competitor, reports miserable quarter Last week, we predicted a 40% drop in sales for the March quarter.
Still, AMD is up 14% over the course of the week, and Intel is up almost 8%. texas instruments and NVIDIA It also recorded a nice profit.
The semiconductor industry is dealing with an oversupply of surplus components at PC and server makers and falling prices for components such as memory and central processing units.But after the disastrous year of 2022, stocks rebound Easing Fed rate hikes and lower inflation are building on signs of a boost for businesses later this year.
look: Watch CNBC’s full interview with Truist’s Youssef Squali.
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